<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2000
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------------------------------------
Commission file number: 0-26023
ALLOY ONLINE, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-3310676
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
151 West 26th Street, 11th floor, New York, NY 10001
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (212) 244-4307
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of December 8, 2000, the registrant had 20,899,625 shares of common stock,
$.01 par value per share, outstanding. All share numbers referenced in this
quarterly report reflect a 1.128-for-1 stock split of all outstanding shares of
common stock effected by Alloy Online, Inc. on May 13, 1999.
<PAGE>
ALLOY ONLINE, INC.
CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE NO.
--------
<S> <C>
Item 1. Financial Statements
Consolidated Condensed Balance Sheets, October 31, 2000 (unaudited)
and January 31, 2000............................................................. 3
Consolidated Condensed Statements of Operations, Three Months Ended
October 31, 2000 (unaudited) and October 31, 1999 (unaudited).................... 4
Consolidated Condensed Statements of Comprehensive Loss,
Three Months Ended October 31, 2000 (unaudited) and October 31, 1999
(unaudited)...................................................................... 5
Consolidated Condensed Statements of Operations, Nine Months Ended
October 31, 2000 (unaudited) and October 31, 1999 (unaudited).................... 6
Consolidated Condensed Statements of Comprehensive Loss,
Nine Months Ended October 31, 2000 (unaudited) and October 31, 1999
(unaudited)...................................................................... 7
Consolidated Condensed Statements of Cash Flows, Nine Months Ended
October 31, 2000 (unaudited) and October 31, 1999 (unaudited).................... 8
Consolidated Condensed Statement of Changes in Stockholders' Equity,
Nine Months Ended October 31, 2000 (unaudited)................................... 9
Notes to Consolidated Condensed Financial Statements (unaudited)................. 10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................................ 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk.............. 19
PART II-OTHER INFORMATION
Item 1. Legal Proceedings........................................................ 20
Item 2. Changes in Securities and Use of Proceeds................................ 20
Item 3 Defaults Upon Senior Securities.......................................... 20
Item 4. Submission of Matters to a Vote of Security Holders...................... 20
Item 5 Other Information........................................................ 21
Item 6. Exhibits and Reports on Form 8-K......................................... 22
SIGNATURES....................................................................... 23
EXHIBIT INDEX.................................................................... 24
EXHIBIT 27 - Financial Data Schedule............................................. 25
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ALLOY ONLINE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
------
January 31, October 31,
2000 2000
--------- ----------
(audited) (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $12,702 $ 3,690
Available-for-sale marketable securities 20,971 20,305
Accounts receivable, net 2,693 2,714
Inventories, net 3,981 18,236
Prepaid catalog costs 1,011 1,767
Other current assets 1,281 1,534
------- --------
TOTAL CURRENT ASSETS 42,639 48,246
Property and equipment, net 2,187 5,602
Goodwill, net of amortization 12,349 55,868
Other assets 493 2,015
------- --------
TOTAL ASSETS $57,668 $111,731
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable, accrued expenses and other
current liabilities $ 12,460 $ 22,142
-------- --------
TOTAL CURRENT LIABILITIES 12,460 22,142
STOCKHOLDERS' EQUITY:
Common Stock; $.01 par value; 50,000,000 shares
authorized; 14,686,437 and 20,899,625 shares
issued and outstanding, respectively 147 209
Additional paid-in capital 68,948 138,244
Accumulated deficit (23,216) (46,098)
Deferred compensation (593) (814)
Accumulated other comprehensive loss (78) (1,952)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 45,208 89,589
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 57,668 $111,731
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLOY ONLINE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (NOTE 6)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(unaudited)
For the three months
ended October 31,
1999 2000
-------- --------
NET MERCHANDISE REVENUES $ 9,242 $ 24,271
SPONSORSHIP AND OTHER REVENUES 524 3,788
----------- -----------
TOTAL REVENUES 9,766 28,059
COST OF GOODS SOLD 4,125 12,351
----------- -----------
GROSS PROFIT 5,641 15,708
----------- -----------
OPERATING EXPENSES:
Selling and marketing 9,736 19,292
General and administrative 1,400 2,997
Goodwill amortization -- 3,250
----------- -----------
TOTAL OPERATING EXPENSES 11,136 25,539
----------- -----------
LOSS FROM OPERATIONS (5,495) (9,831)
INTEREST INCOME, NET 600 150
----------- -----------
NET LOSS $ (4,895) $ (9,681)
=========== ===========
BASIC AND DILUTED LOSS PER SHARE OF
COMMON STOCK (Note 3):
Net Loss $(0.34) $(0.46)
=========== ===========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING: 14,231,797 20,899,625
=========== ===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLOY ONLINE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(AMOUNTS IN THOUSANDS)
(unaudited)
<TABLE>
<CAPTION>
For the three months
ended October 31,
1999 2000
------- --------
<S> <C> <C>
Net Loss $(4,895) $ (9,681)
Other comprehensive loss, net of tax:
Net unrealized loss on available-for-sale securities (23) (5,827)
------- --------
Comprehensive Loss $(4,918) $(15,508)
======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLOY ONLINE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (NOTE 6)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(unaudited)
<TABLE>
<CAPTION>
For the nine months
ended October 31,
1999 2000
------------- -----------
<S> <C> <C>
NET MERCHANDISE REVENUES $ 16,011 $ 40,152
SPONSORSHIP AND OTHER REVENUES 906 8,569
----------- -----------
TOTAL REVENUES 16,917 48,721
COST OF GOODS SOLD 7,273 19,815
----------- -----------
GROSS PROFIT 9,644 28,906
----------- -----------
OPERATING EXPENSES:
Selling and marketing 17,448 39,777
General and administrative 3,465 7,716
Goodwill amortization -- 5,265
----------- -----------
TOTAL OPERATING EXPENSES 20,913 52,758
----------- -----------
LOSS FROM OPERATIONS (11,269) (23,852)
INTEREST INCOME, NET 994 970
----------- -----------
LOSS BEFORE EXTRAORDINARY ITEM (10,275) (22,882)
EXTRAORDINARY ITEM:
Charge for early retirement of debt 235 --
----------- -----------
NET LOSS $ (10,510) $ (22,882)
=========== ===========
BASIC AND DILUTED LOSS PER SHARE
OF COMMON STOCK (Note 3):
Before Extraordinary Item $ (0.84) $ (1.26)
Extraordinary Item (0.02) --
----------- -----------
Net Loss $ (0.86) $ (1.26)
=========== ===========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
12,175,624 18,110,921
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLOY ONLINE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(AMOUNTS IN THOUSANDS)
(unaudited)
For the nine months
ended October 31,
1999 2000
-------- --------
Net Loss $(10,510) $(22,882)
Other comprehensive income, net of tax:
Net unrealized loss on available-for-sale securities (102) (1,874)
-------- --------
Comprehensive Loss $(10,612) $(24,756)
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLOY ONLINE, INC.
Consolidated Condensed Statements of Cash Flows (Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the nine months
ended October 31,
1999 2000
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (10,510) $(22,882)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 165 6,102
Extraordinary charge for early retirement of debt 235 --
Compensation charge for issuance of stock options 419 357
Accrued interest on promissory notes 124 --
Changes in operating assets and liabilities - net of effect of
business acquisitions -
(Increase) decrease in:
Accounts receivable (412) 10
Inventories, net (3,242) (7,908)
Other current assets (3,885) (633)
Other assets 29 (503)
Increase in:
Accounts payable and accrued expenses 9,270 3,799
----------- --------
Net cash used in operating activities (7,807) (21,658)
----------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (purchases) sales of marketable securities (32,197) 18,322
Capital expenditures (933) (2,390)
Cash paid in connection with acquisition of business,
net of cash acquired -- (11,453)
Purchase of non-marketable securities -- (1,000)
Purchase of domain name and mailing list (250) --
----------- --------
Net cash (used in) provided by investing activities (33,380) 3,479
----------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of common stock 50,149 9,189
Net proceeds from stock subscription receivable 2,497 --
Exercise of stock options and warrants 30 29
Payments of promissory notes (4,212) --
Payments of capital lease obligation (56) (51)
----------- --------
Net cash provided by financing activities 48,408 9,167
----------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 7,221 (9,012)
CASH AND CASH EQUIVALENTS, beginning of period 2,983 12,702
----------- --------
CASH AND CASH EQUIVALENTS, end of period $ 10,204 3,690
=========== ========
Supplemental disclosure of non-cash investing and financing
activity:
Purchase of computer equipment under capital lease $ 6 $ --
Exercise of stock options $ 4 $ --
Deferred compensation $ 857 $ 167
Fair value of Liberty Digital, Inc. common stock received in
connection with exchange transaction $ -- $ 19,530
Fair value of common stock issued in connection with purchase of
Kubic Marketing, Inc. (Note 4) $ -- $ 40,033
Accumulated other comprehensive loss $ (102) $ (1,874)
Conversion of preferred stock into common stock $ 4,846 $ --
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLOY ONLINE, INC.
Consolidated Condensed Statement of Changes in Stockholders' Equity (unaudited)
(Amounts in thousands, except share data)
For the Nine Months Ended October 31, 2000
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other
---------------- Paid-in Accumulated Deferred Comprehensive
Shares Amount Capital Deficit Compensation (Loss) Income Total
------ ------ ------- ------- ------------ --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, February 1, 2000 14,686,437 $147 $ 68,948 ($23,216) ($593) ($78) $ 45,208
Issuance of common stock for
purchase of Kubic Marketing, Inc. 3,267,981 33 40,000 -- -- -- 40,033
Proceeds from issuance of common stock
in connection with the Liberty
Digital, Inc. transaction, net of 2,922,694 29 28,690 -- -- -- 28,719
issuance costs
Issuance of stock options to
consultants for services rendered -- -- 577 -- (577) -- --
Amortization of deferred compensation -- -- -- -- 356 -- 356
Issuance of common stock pursuant to
the exercise of options and warrants
and the employee stock purchase plan 22,513 -- 29 -- -- -- 29
Net loss -- -- -- (22,882) -- -- (22,882)
Net unrealized loss on
available-for-sale marketable
securities -- -- -- -- -- (1,874) (1,874)
---------- ---- -------- -------- ----- ------- --------
Balance, October 31, 2000 20,899,625 $209 $138,244 ($46,098) ($814) ($1,952) $ 89,589
========== ==== ======== ======== ===== ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ALLOY ONLINE, INC.
------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
1. FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements have been prepared by Alloy Online,
Inc. ("Alloy"), without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations, comprehensive
losses and cash flows at October 31, 2000 and for all periods presented
have been made. The results of operations for the periods ended October 31,
2000 and 1999 are not necessarily indicative of the operating results for a
full year.
Certain information and footnote disclosures prepared in accordance with
generally accepted accounting principles and normally included in the
financial statements have been condensed or omitted. It is suggested that
these financial statements and notes be read in conjunction with the
financial statements and notes related to the Company's fiscal year ended
January 31, 2000 included in Alloy's Annual Report on Form 10-K for the
fiscal year ended January 31, 2000 filed with the Securities and Exchange
Commission on May 1, 2000.
2. BUSINESS
Alloy was incorporated in the State of Delaware on January 22, 1996 and is
a leading Web-centric direct marketing company serving the unique interests
and tastes of the high growth Generation Y (10 to 24 year olds)
marketplace. Through our Web sites, www.alloy.com and www.ccs.com,
Generation Y boys and girls can interact, share information, explore
compelling and relevant content and shop. Through our Web sites and our
Alloy and CCS direct mail catalogs, we offer Generation Y boys and girls a
variety of merchandise, including boys and girls apparel, accessories,
footwear, cosmetics, room furnishings and action sports equipment.
3. NET LOSS PER SHARE
The following table sets forth the computation of net loss per share. Alloy
has applied the provisions of SFAS No. 128, "Earnings Per Share" in the
calculations below. Amounts in thousands, except share and per share data:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended October 31, Ended October 31,
---------------- ----------------
1999 2000 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator:
Loss before extraordinary item $ (4,895) $ (9,681) $ (10,275) $ (22,882)
Accretion of preferred stock -- -- (13) --
----------- ----------- ----------- -----------
Loss before extraordinary item available
to common stockholders
(4,895) (9,681) (10,288) (22,882)
Extraordinary item -- -- (235) --
----------- ----------- ----------- -----------
Net loss $ (4,895) $ (9,681) $ (10,523) $ (22,882)
=========== =========== =========== ===========
Denominator:
Weighted average shares outstanding 14,231,797 20,899,625 12,175,624 18,110,921
=========== =========== =========== ===========
Basic and Diluted:
Loss per share before extraordinary item $ (0.34) $ (0.46) $ (0.84) $ (1.26)
Extraordinary item $ -- $ -- $ (0.02) $ --
----------- ----------- ----------- -----------
Net loss per share $ (0.34) $ (0.46) $ (0.86) $ (1.26)
=========== =========== =========== ===========
</TABLE>
<PAGE>
4. KUBIC MARKETING ACQUISITION
On July 18, 2000, Alloy completed an acquisition of all of the outstanding
capital stock of Kubic Marketing, Inc. ("Kubic"), a Delaware corporation
with a principal place of business in San Luis Obispo, California. The
acquisition was effected pursuant to an Agreement and Plan of
Reorganization dated as of July 17, 2000, (the "Reorganization Agreement")
by and between Alloy, Alloy Acquisition Sub, Inc., a Delaware corporation
("Acquisition Sub") and a wholly owned subsidiary of Alloy, Kubic and SWI
Holdings LLC, a Delaware limited liability company and the sole stockholder
of Kubic (the "Stockholder"), pursuant to which Acquisition Sub was merged
with and into Kubic (the "Merger") with Kubic continuing as the surviving
corporation and a wholly-owned subsidiary of Alloy. Kubic is the holding
company for its wholly-owned subsidiary, Phase Three, Inc. (which does
business as CCS), which is one of the largest mail order catalog and
Internet marketers in the United States of skateboards, snowboards and
related apparel, equipment and accessories. CCS is also one of the largest
mail order catalogs serving the Generation Y skate and snowboard market
with a database of over one million buyers and requesters. In addition, CCS
reaches the extreme-sport oriented Generation Y boys through its Website
which it promotes in its catalogs. The Merger has been structured to
qualify as a tax-free reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended, and has been accounted
for under the purchase method of accounting for business combinations.
In connection with the Merger, Alloy issued to the Stockholder (i)
3,267,981 shares of Alloy's common stock, $.01 par value per share, having
a value of $40.0 million on the date of the acquisition, and (ii) a warrant
to purchase shares of Alloy's restricted common stock, $.01 par value per
share, in an aggregate amount, if any, as determined pursuant to the
provisions of the warrant. The warrant is exercisable only during the
period beginning 12 months and ending 15 months following the closing of
the Merger. The warrant has an exercise price equal to the par value of the
underlying shares. The number of shares, if any, that may be purchased
pursuant to the warrant will be determined by the monthly average price of
Alloy's common stock for each of the 12 months following the closing of the
Merger. The value of the warrant, if any, will be determined upon
resolution of the contingent conditions cited in the warrant agreement and
could result in a change to the purchase price allocation and future
amortization of goodwill. In addition, in connection with obtaining the
consent to the Merger of certain of the lenders to Kubic and the
Stockholder's other subsidiaries, Alloy paid $10.0 million in cash from its
existing cash reserves to such lenders to retire certain debt obligations
of Kubic.
In connection with the acquisition, Alloy has recorded approximately $48.8
million of goodwill representing the net excess of purchase price over the
fair value of the net assets acquired, based upon a preliminary purchase
price allocation. The goodwill is being amortized over a period of five
years.
Summarized unaudited pro forma information reflecting the impact of the
acquisition on Alloy's results of operations for the nine month periods
ended October 31, assuming the acquisition had occurred at the beginning of
the periods, is as follows (amounts in thousands, except per share data):
<TABLE>
<CAPTION>
NINE MONTHS ENDED
October 31, 1999 October 31, 2000
---------------- ----------------
<S> <C> <C>
Revenues $ 38,003 $ 64,629
Loss before extraordinary item (15,623) (27,310)
Net loss (15,858) (27,310)
Net loss per share of common stock before extraordinary item $ (1.01) $ (1.36)
Net loss per share of common stock $ (1.03) $ (1.36)
</TABLE>
5. DERIVATIVE FINANCIAL INSTRUMENTS
In July 2000, Alloy purchased put options and sold call options on a total
of 600,000 shares of Liberty Digital, Inc. ("LDIG") common stock,
representing a portion of LDIG common stock already owned by Alloy as
available-for-sale marketable securities. The options allow Alloy to sell
LDIG common stock at various prices and have been designated as a hedge
against potential declines in the fair value of LDIG common stock. The
options expire on various dates beginning January 2003 through July 2003.
The net fair value of the options was
<PAGE>
$7.8 million on October 31, 2000 and they have been classified as
available-for-sale marketable securities with a corresponding amount
included in accumulated other comprehensive income in the accompanying
consolidated condensed balance sheet.
Alloy is required to adopt the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities" as of February 1, 2001. The options
referred to above have been designated as fair value hedges pursuant to
SFAS No. 133. Upon adoption of SFAS No. 133, Alloy will be required to
continue to reflect the fair value of the options outstanding on the
balance sheet and will adjust changes in fair value of the options through
the statement of operations. Additionally, the change in fair value of the
underlying LDIG shares will also be recorded through the statement of
operations to the extent of the number of shares covered by the options.
The remainder of the LDIG shares owned and not covered by hedging
instruments will continue to be accounted for as available-for-sale
securities, with changes in fair value reflected in comprehensive income.
Had Alloy adopted the provisions of SFAS No. 133 prior to the effective
date, the net impact on the results of operations from the purchase date of
the options through October 31, 2000 would have been an increase in net
loss of approximately $3.3 million.
Alloy is continuing to evaluate the impact of the future adoption of SFAS
No. 133 on its existing financial instruments and contracts and will
reflect any required changes as of February 1, 2001.
6. RECENTLY ISSUED ACCOUNTING STANDARDS
In July 2000, the Emerging Issues Task Force ("EITF") reached a consensus
with respect to EITF Issue No. 00-10, "Accounting for Shipping and Handling
Revenues and Costs". The purpose of this issue discussion was to clarify
the classification of shipping and handling revenues and costs. The
consensus reached was that all shipping and handling billed to customers is
revenue. We have presented our condensed consolidated statements of
operations for the three and nine month periods ended October 31, 2000 in
accordance with this issue. Furthermore, we have re-classified our
condensed consolidated statements of operations for the three and nine
months ended October 31, 1999 to conform with this issue as we formerly
netted our shipping and handling revenues with the related costs and
included the residual amount as selling and marketing expenses. The impact
of this re-classification resulted in an increase of net merchandise
revenues of $631,000 and $1.4 million for the three and nine months ended
October 31, 1999, respectively, offset by an equivalent increase in selling
and marketing expenses for these periods. Furthermore, EITF Issue No. 00-10
requires that if shipping costs or handling costs are significant and are
not included in cost of sales, these costs and the line items which include
them on the income statement should be disclosed. Alloy includes these
costs in Selling and Marketing expenses in its Condensed Consolidated
Statements of Operations. These costs were $2.5 million and $1.1 million
for the three months ended October 31, 2000 and October 31, 1999,
respectively, and $4.1 million and $2.5 million for the nine months ended
October 31, 2000 and October 31, 1999, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion of the financial condition and results of operation of
Alloy should be read in conjunction with the Financial Statements and the
related Notes included elsewhere in this Report. This discussion contains
forward-looking statements that involve risks and uncertainties. Our actual
results may differ materially from those anticipated in these forward-looking
statements as a result of various factors.
OVERVIEW
Alloy Online is a leading Web-centric direct marketing company serving
the unique interests and tastes of Generation Y. Through our Web sites,
www.alloy.com (the "Alloy Web Site") and www.ccs.com, Generation Y boys and
girls can interact, share information, explore compelling and relevant content
and shop. Through our Web sites and our Alloy and CCS direct mail catalogs, we
offer Generation Y boys and girls a variety of merchandise, including boys and
girls apparel, accessories, footwear, cosmetics, room furnishings and action
sporting goods such as skateboards and skateboard accessories.
<PAGE>
Our revenues consist of merchandise revenues and sponsorship and other
revenues. We generate merchandise revenues through both our catalogs and our Web
sites. We generate sponsorship and other revenues primarily through the sale of
sponsorships, banner advertisements, co-marketing programs and other revenue
sharing arrangements on our Web sites and in our catalog, and through the
publishing of book properties we develop. Revenues from sales of merchandise are
recognized at the time products are shipped to customers net of an allowance for
sales returns which is determined in accordance with our return policy and is
based on historical experience. Revenues from sponsorships, advertising and
other arrangements are recognized during the period in which the sponsorship or
advertisement is displayed, provided that no significant performance obligations
remain and the collection of the related receivable is probable. Revenues from
sales of Internet advertisements are recognized net of commissions paid to
advertising sales firms and to technology and content providers. Revenues earned
and related expenses incurred in connection with our book development activities
are recognized upon property publication. Any amounts received or paid prior to
publication are treated as advances and classified as a current liability or
current asset.
We were incorporated in January 1996, launched the Alloy Web Site in August
1996 and began recognizing meaningful revenues in August 1997 following the
distribution of our first Alloy catalog. To date, the majority of our revenues
have been generated through merchandise sales., Sponsorship and other revenues,
however, have been increasing and we believe that they will continue to increase
in future periods as a result of our plan to increase visitors to our Web Sites
and further develop our marketing and sales team to capitalize on our
sponsorship, advertising and other revenue opportunities. In May 1999, we issued
3,700,000 shares of common stock in our initial public offering (the "Offering")
and received approximately $50.1 million in net proceeds, after deduction of
underwriter's commissions and discounts and expenses related to the Offering. In
April 2000, we entered into a financial and strategic arrangement with Liberty
Digital, Inc. ("LDIG"), a subsidiary of Liberty Media Group, Inc., pursuant to
which we issued 2,922,694 shares of common stock to a subsidiary of LDIG in
exchange for $9.2 million in net cash proceeds and 837,740 shares of LDIG common
stock. In July 2000, we purchased all of the capital stock of Kubic Marketing,
Inc. ("Kubic"), which through its subsidiary Phase Three, Inc. owned the CCS
direct marketing business, in exchange for 3,267,981 shares of Alloy common
stock, $.01 par value per share; a warrant to purchase shares of Alloy's common
stock, $.01 par value per share, in an aggregate amount, if any, as determined
pursuant to the provisions of the warrant; and $10.0 million in cash to retire
debt obligations of Kubic.
We incurred net losses of approximately $118,000 for the fiscal year ended
January 31, 1997, $1.9 million for the fiscal year ended January 31, 1998, $6.4
million for the fiscal year ended January 31, 1999, $14.9 million for the year
ended January 31, 2000, and $22.9 million for the nine months ended October 31,
2000. These net losses resulted primarily from the costs associated with
developing the Alloy Web Site and database of Generation Y boys and girls,
attracting users to the Alloy Web Site and establishing the Alloy brand. Because
of our plans to invest heavily in marketing and promotion, to hire additional
employees and to develop our Web sites and operating infrastructure, we expect
to incur significant net losses for the foreseeable future. Although we have
experienced revenue growth in recent periods, this growth may not be sustainable
and, therefore, these recent periods should not be considered indicative of
future performance. We may never achieve significant revenues or profitability,
or if we achieve significant revenues they may not be sustained in future
periods.
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth the statement of operations data for the
periods indicated as a percentage of revenues. Any trends reflected by the
following table may not be indicative of future results.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
OCTOBER 31,
-----------
1999 2000
---- ----
<S> <C> <C>
Net merchandise revenues. 94.6% 86.5%
Sponsorship and other revenues 5.4 13.5
------ ------
Total revenues 100.0 100.0
Cost of goods sold 42.2 44.0
------ ------
Gross profit 57.8 56.0
Operating expenses:
Selling and marketing 99.7 68.7
General and administrative 14.3 10.7
Amortization of goodwill -- 11.6
Total operating expenses 114.0 91.0
------ ------
Loss from operations (56.2) (35.0)
Interest income, net 6.1 0.5
------ ------
Net loss (50.1)% (34.5)%
</TABLE>
COMPARISON OF THREE MONTHS ENDED OCTOBER 31, 1999 AND 2000
Revenue.
Merchandise Revenues. Net merchandise revenues increased 162.6% from $9.2
million in the three months ended October 31, 1999 to $24.3 million in the three
months ended October 31, 2000. The increase in merchandise revenues in the three
months ended October 31, 2000 was due primarily to the significant increase in
orders driven by our expanded database of Generation Y buyers and prospects to
whom we marketed in the quarter, which included the CCS database.
Sponsorship and Other Revenues.
Sponsorship and other revenues amounted to $3.8 million in the three months
ended October 31, 2000 as compared to $524,000 in the three months ended October
31, 1999. The increase in sponsorship and other revenues in the three months
ended October 31, 2000 resulted from the increased number of visitors to the
Alloy Web Site and the expanding commercial relationships with advertisers we
are developing through our in-house advertising sales group, together with the
contribution of the book development business we purchased in January 2000. As
Alloy's online community continues to grow and our sales force further develops
client relationships, we anticipate our sponsorship and other revenues to
increase significantly on a comparative basis.
Cost of Goods Sold.
Cost of goods sold consists of the cost of the merchandise sold by Alloy
plus the freight cost to deliver the merchandise to the warehouse, along with
the directly allocated costs associated with book development. Our cost of goods
sold increased 199.4% from $4.1 million in the three months ended October 31,
1999 to $12.4 million in the three months ended October 31, 2000. The increase
in cost of goods sold was due primarily to the increase in merchandise sales
volume. Alloy's gross profit as a percentage of total revenues decreased from
57.8% in the three months ended October 31, 1999 to 56.0% in the three months
ended October 31, 2000 due to the inclusion of the
<PAGE>
lower margin CCS merchandise revenues in the current three month period. The
gross margin impact was somewhat offset by the substantially larger percentage
of sponsorship and other revenues in our total revenue mix in the three months
ended October 31, 2000.
Operating Expenses.
Selling and Marketing. Selling and marketing expenses consist primarily of
Alloy catalog production and mailing costs; our call center and fulfillment
operations expenses; packaging and freight costs to deliver our merchandise to
our customers; salaries of our sales and marketing personnel; advertising and
marketing costs; and expenses related to the development, maintenance and
marketing of our Web sites. These expenses increased 98.2% from $9.7 million in
the three months ended October 31, 1999 to $19.3 million in the three months
ended October 31, 2000 due to the increased costs incurred in marketing to our
expanded database, increased Web site promotion and development, and the hiring
of selling and marketing staff. As a percentage of total revenues, our selling
and marketing expenses decreased from 99.7% in the three months ended October
31, 1999 to 68.7% in the three months ended October 31, 2000. The decrease was
primarily driven by the growth in sponsorship and other revenues and the
increased efficiency of marketing to our expanded customer database.
We expect selling and marketing expenses to increase significantly in
future periods. These increases will be principally related to marketing our
merchandise offerings to an expanded database, fulfilling and shipping an
increased number of merchandise orders to our growing customer base, and hiring
additional sales and marketing personnel.
General and Administrative.
General and administrative expenses consist primarily of salaries and
related costs for our executive, administrative, finance and management
personnel, as well as support services and professional service fees. These
expenses increased 114.1% from $1.4 million in the three months ended October
31, 1999 to $3.0 million in the three months ended October 31, 2000. As a
percentage of total revenues, our general and administrative expenses decreased
from 14.3% in the three months ended October 31, 1999 to 10.7% in the three
months ended October 31, 2000. The increase in general and administrative
expenses was driven by an increase in compensation expense for additional
personnel to handle our growing business; together with expenses incurred as a
result of our growth as a public company, such as professional fees, insurance
premiums, public relations costs; and the inclusion of CCS in the current three
month period. The decline in general and administrative expenses as a percentage
of total revenues in the three months ended October 31, 2000 was due to the
larger revenue base over which to spread these expenses. We expect general and
administrative expenses to grow as we hire additional personnel and incur
additional expenses related to the growth of our operations as a public company.
Amortization of Goodwill.
Amortization of goodwill was approximately $3.3 million in the three months
ended October 31, 2000 as compared to zero in the three months ended October 31,
1999. These costs were recorded in connection with our acquisition of
substantially all of the assets of Celebrity Sightings, LLC in December 1999;
the merger of our acquisition subsidiary with and into 17th Street Acquisition
Corp., the sole stockholder of 17th Street Productions, Inc. in January 2000;
and the merger of our acquisition subsidiary with and into Kubic Marketing,
Inc., the holding company of Phase Three, Inc., in July 2000. These acquisitions
were accounted for under the purchase method of accounting. We anticipate that
the future amortization of goodwill in connection with these acquisitions will
continue to be amortized on a straight-line basis over three years in the case
of Celebrity Sightings, LLC, five years in the case of 17th Street Productions,
Inc., and five years in the case of Kubic Marketing, Inc., and will amount to
approximately $3.3 million per quarter until the end of fiscal 2002 and
approximately $2.8 million per quarter thereafter until the related goodwill is
fully amortized. Any additional acquisitions or impairment of goodwill could
result in additional merger and acquisition related costs.
Loss from Operations
As described above, we have invested heavily to build the Alloy brand, grow
our customer database, enhance and attract visitors to the Alloy and CCS Web
Sites, increase the number of our employees to support a
<PAGE>
growing operation, and purchase complementary businesses. For the foregoing
reasons, our loss from operations increased from $4.9 million in the three
months ended October 31, 1999 to $9.7 million in the three months ended October
31, 2000.
Interest Income, Net
Interest income net of expense includes income from our cash and cash
equivalents and from investments and expenses related to our financing
obligations. We generated net interest income of $600,000 in the three months
ended October 31, 1999 and $150,000 in the three months ended October 31, 2000.
The decline in net interest income resulted from the reduced cash and interest-
bearing short-term investments held by Alloy in the three month period ended
October 31, 2000 after deploying these funds to grow the business and acquire
CCS.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
OCTOBER 31,
----------
1999 2000
---- ----
<S> <C> <C>
Net merchandise revenues. 94.6% 82.4%
Sponsorship and other revenues 5.4 17.6
------ ------
Total revenues 100.0 100.0
Cost of goods sold 43.0 40.7
------ ------
Gross profit 57.0 59.3
Operating expenses:
Selling and marketing 103.1 81.6
General and administrative 20.5 15.8
Amortization of goodwill 10.9
Total operating expenses 123.6 108.3
------ ------
Loss from operations (66.6) (49.0)
Interest (expense) income, net 5.9 2.0
Charge for early retirement of debt (1.4) --
------ ------
Net loss (62.1)% (47.0)%
</TABLE>
COMPARISON OF NINE MONTHS ENDED OCTOBER 31, 1999 AND 2000
Revenues
Merchandise Revenues. Net merchandise revenues increased 150.8% from $16.0
million in the nine months ended October 31, 1999 to $40.2 million in the nine
months ended October 31, 2000. The increase in merchandise revenues in the nine
months ended October 31, 2000 was due primarily to the significant increase in
orders driven by our expanded database of Generation Y buyers and prospects to
whom we marketed in the period, which included the CCS database to which we
marketed during the a portion of the period.
Sponsorship and Other Revenues.
Sponsorship and other revenues amounted to $8.6 million in the nine months
ended October 31, 2000 as compared to $906,000 in the nine months ended October
31, 1999. The increase in sponsorship and other revenues in the nine months
ended October 31, 2000 resulted from the increased number of visitors to the
Alloy Web Site and the expanding commercial relationships with advertisers we
are developing through our in-house advertising sales group, together with the
contribution of the book development business we purchased in January 2000. As
Alloy's online community continues to grow and our sales force further develops
client relationships, we anticipate our sponsorship and other revenues to
increase significantly on a comparative basis.
<PAGE>
Cost of Goods Sold
Cost of goods sold increased 172.4% from $7.3 million in the nine months
ended October 31, 1999 to $19.8 million in the nine months ended October 31,
2000. The increase in cost of goods sold was due primarily to the increase in
merchandise sales volume. Alloy's gross profit as a percentage of total revenues
increased from 57.0% in the nine months ended October 31, 1999 to 59.3% in the
nine months ended October 31, 2000 due to the substantially larger percentage of
sponsorship and other revenues in our total revenue mix, which more than offset
the negative impact of including CCS' lower margin net merchandise revenues.
Operating Expenses
Selling and Marketing. Selling and marketing expenses increased 128.0% from
$17.4 million in the nine months ended October 31, 1999 to $39.8 million in the
nine months ended October 31, 2000 due to the increased costs incurred in
marketing to our expanded database, increased Web site promotion and
development, and the hiring of selling and marketing staff. As a percentage of
total revenues, our selling and marketing expenses decreased from 103.1% in the
nine months ended October 31, 1999 to 81.6% in the nine months ended July 31,
2000. The decrease was primarily driven by the growth in sponsorship and other
revenues and the increased efficiency of marketing to our expanded customer
database.
General and Administrative. General and administrative expenses increased
122.7% from $3.5 million in the nine months ended October 31, 1999 to $7.7
million in the nine months ended October 31, 2000. As a percentage of total
revenues, our general and administrative expenses decreased from 20.5% in the
nine months ended October 31, 1999 to 15.8% in the nine months ended October 31,
2000. The increase in general and administrative expenses in the nine months
ended October 31, 2000 was driven by an increase in compensation expense for
additional personnel to handle our growing business; together with expenses
incurred as a result of our growth as a public company, such as professional
fees, insurance premiums and public relations costs; and the acquisition of the
CCS business. The decline in general and administrative expenses as a percentage
of total revenues in the first nine months of fiscal 2000 was due to the larger
revenue base over which to spread these expenses.
Amortization of Goodwill. Amortization of goodwill was approximately $5.3
million in the nine months ended October 31, 2000 as compared to zero in the
nine months ended October 31, 1999. These costs were recorded in connection with
our acquisition of substantially all of the assets of Celebrity Sightings, LLC
in December 1999; the merger of our acquisition subsidiary with and into 17th
Street Acquisition Corp., the sole stockholder of 17th Street Productions, Inc.
in January 2000; and the merger of our acquisition subsidiary with and into
Kubic Marketing, Inc., the holding company of Phase Three, Inc., in July 2000.
Loss from Operations
As described above, we have invested heavily to build the Alloy brand, grow
our customer database, enhance and attract visitors to our Web sites, increase
the number of our employees to support a growing operation, and purchase
complementary businesses. For the foregoing reasons, our loss from operations
increased from $10.5 million in the nine months ended October 31, 1999 to $22.9
million in the nine months ended October 31, 2000.
Interest Income, Net
Interest income net of expense includes income from our cash and cash
equivalents and from investments and expenses related to our financing
obligations. We generated net interest income of $994,000 in the nine months
ended October 31, 1999 and $970,000 in the nine months ended October 31, 2000
from the investment of the proceeds raised in the Offering and, in the case of
the nine months ended October 31, 2000, from the sale of a minority stake to
LDIG. In the nine months ended October 31, 1999, we paid interest on the
promissory notes that we retired upon the closing of the Offering in May 1999.
Extraordinary Item
<PAGE>
As a result of the early retirement of our outstanding promissory notes
upon the closing of the Offering, we incurred a one-time extraordinary charge of
$235,000 in the nine months ended October 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations primarily through the sale of equity and
debt securities as we have generated negative cash flow from operations since
our inception. In May 1999, we raised approximately $50.1 million in net
proceeds upon the closing of the Offering. In April 2000, we raised $9.2 million
in net cash proceeds and acquired 837,740 shares of LDIG common stock in
connection with our sale of 2,922,694 shares of Alloy common stock to a
subsidiary of LDIG. At October 31, 2000, we had approximately $3.7 million of
cash and cash equivalents and a further $20.3 million of marketable securities.
Our principal commitments at October 31, 2000 consisted of accounts payable,
accrued expenses and obligations under operating leases.
Net cash used in operating activities was $7.8 million in the nine months
ended October 31, 1999 and $21.7 million in the nine months ended October 31,
2000. The principal use of cash in both periods was to fund our losses from
operations.
Cash provided by investing activities was $3.5 million in the nine months
ended October 31, 2000 due to the net effect of sales and maturities of
marketable securities, offset by the application of the proceeds to the purchase
of Kubic Marketing, Inc., capital expenditures and strategic investing
activities. Cash used in investing activities was $33.4 million in the nine
months ended October 31, 1999 due to the investment of proceeds from the
Offering in high quality, fixed-income securities; our capital expenditures for
computers, office furniture and equipment; and the acquisition of certain
intangible assets, consisting of a Web site domain name and a customer mailing
list in separate transactions.
Net cash provided by financing activities was approximately $48.4 million
in the nine months ended October 31, 1999 due to the proceeds from the Offering
and the collection of the stock subscription receivable associated with the
second installment of our Series A Preferred Stock sold in November 1998. In the
nine months ended October 31, 2000, we received $9.2 million in net cash
proceeds from our sale of 2,922,694 shares of Alloy common stock to a subsidiary
of LDIG.
We currently anticipate that we will continue to experience significant
growth in our operating expenses for the foreseeable future as we build our
brand and customer database and that our operating expenses will be a material
use of our cash resources. We believe that in light of our liquidity position as
of October 31, 2000 consisting of $24.0 million of cash and marketable
securities and our debt-free capital structure, our existing working capital and
cash flows from operations will be sufficient to meet our anticipated cash needs
for working capital and capital expenditures for at least the next 24 months,
although we will consider attractive opportunities to raise additional capital
should these opportunities arise. If cash generated from operations is
insufficient to satisfy our cash needs, we may be required to raise additional
funds. If we raise additional funds through the issuance of equity securities,
our existing shareholders may experience significant dilution. Furthermore,
additional financing may not be available when needed or, if available,
financing may not be on terms favorable to us or our stockholders. If financing
is not available when required or is not available on acceptable terms, we may
be unable to develop or enhance our products or services. In addition, we may be
unable to take advantage of business opportunities or respond to competitive
pressures. Any of these events could have a material and adverse effect on our
business, results of operations and financial condition.
ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. SFAS No.
133 is effective for our first fiscal quarter beginning February 1, 2001 and
will not require retroactive restatement of prior period financial statements.
This statement requires the recognition of all derivative instruments as either
assets or liabilities in the balance sheet measured at fair value. Generally,
increases or decreases in the fair value of derivative instruments will be
<PAGE>
recognized as gains or losses in earnings in the period of change. If certain
conditions are met, where the derivative instrument has been designated as a
fair value hedge, the hedged item may also be marked to market through earnings
thus creating an offset. If the derivative is designated as a cash flow hedge,
the changes in fair value of the derivative instrument may be recorded on the
balance sheet as other comprehensive income.
We are currently in the process of identifying all potential derivative
instruments and embedded derivative instruments and will reflect any required
changes as of the February 1, 2001 adoption date. In July 2000, we hedged our
exposure to adverse changes in value of certain available-for-sale marketable
securities through "cashless collars" that will either provide the counterparty
to the collars with an option to purchase the underlying securities, or require
the counterparty to purchase the underlying securities at specified prices,
pursuant to the terms of the options. These instruments qualify as fair value
hedges, as defined in SFAS No. 133. Upon adoption of SFAS No. 133, the change in
fair value of the collars will be reflected in the statement of operations,
offset by changes in fair value of the underlying securities.
In July 2000, the Emerging Issues Task Force ("EITF") reached a consensus
on Issue No. 00-10, "Accounting for Shipping and Handling Revenues and Costs".
This consensus addressed the classification of shipping and handling revenues
and costs and requires that all amounts billed to customers for shipping and
handling be classified as revenues. No consensus was reached regarding the
classification of shipping and handling costs as either costs of sales or
operating expenses. Prior to this EITF consensus, we netted shipping and
handling revenues with the related costs, and the residual revenues or costs
were reflected as part of selling and marketing expenses. Commencing with our
third fiscal 2000 quarter, we have reclassified all shipping and handling
revenues that were previously netted against the related costs in selling and
marketing expenses. Our historical loss from operations, net loss and net loss
per share have not been affected by this reclassification.
FORWARD-LOOKING STATEMENTS - SAFE HARBOR PROVISION
Statements in this report expressing our expectations and beliefs regarding
our future results or performance are forward-looking statements that involve a
number of substantial risks and uncertainties. When used in this Form 10-Q, the
words "anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions as they relate to the Company or its management are intended to
identify such forward-looking statements. Our actual future results may differ
significantly from those stated in any forward-looking statements. These
statements include statements regarding our ability to increase revenues
significantly, generate multiple revenue streams and increase visitors to our
Web sites; our ability to develop our sales and marketing teams; our ability to
capitalize on our sales and marketing efforts; our ability to capitalize on our
promotions, sponsorship, advertising and other revenue opportunities; our
ability to build the Alloy and CCS brand names and develop our on-line
community; our ability to develop commercial relationships with advertisers; the
appeal of our Web sites to marketers and users; and our ability to meet
anticipated cash needs for working capital and capital expenditures for the next
24 months.
Such statements are based upon management's current expectations and are
subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in or implied by the forward-looking statements.
Factors that might cause or contribute to such differences include, among
others: our expected future losses; our planned sales and marketing campaigns
may not attract sufficient additional visitors to our Web sites; our planned
sales and marketing campaigns may not increase our revenues or generate
additional revenue streams; we lack experienced management and personnel; we may
not be able to manage successfully the risks and challenges associated with
integrating newly acquired businesses; we may fail to further develop our
internal sales and marketing organization to attract promotions, sponsorship,
advertising and other revenues; we may not be able to adapt as internet
technologies and customer demands continue to evolve; increased competition in
the online commerce market would reduce our revenues; increased volatility in
the online retail sales market may affect our revenues; we may experience
business disruptions with third parties that provide us with essential business
operations; and general economic conditions.
As a result of the foregoing and other factors, we may experience material
fluctuations in future operating results on a quarterly or annual basis which
could materially and adversely affect our business, financial condition,
<PAGE>
operating results and stock price. We are not under any duty to update any of
the forward-looking statements in this report to conform these statements to
actual results, unless required by law.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Alloy is exposed to market risk as a result of our holding of 837,740
shares of LDIG common stock. Market risk with respect to this holding refers to
the risk of loss arising from adverse changes in LDIG's stock price. In order to
illustrate the effect of changes in LDIG's stock price, we provide the following
sensitivity analysis. Had the stock price of LDIG been 10% lower at October 31,
2000, the value of our LDIG holding would have been lower by approximately $1.0
million.
In July 2000, we entered into a series of three "cashless collars" with a
financial services institution with respect to 600,000 LDIG shares owned by us.
Each of the cashless collars covers 200,000 shares of LDIG and has stated terms
of approximately 30 months, 33 months and 36 months, respectively. In effect, we
purchased put options that give us the right to require the counterparty to buy
600,000 LDIG shares from us in 30 to 36 months at an average price of
approximately $27.88 per share. We simultaneously sold call options giving the
counterparty the right to buy 600,000 LDIG shares from Alloy in 30 to 36 months
at an average price of approximately $51.70 per share. Since the purchase price
of the put options was equal to the proceeds from the sale of the call options,
the collar transactions were at no cost to us.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
(a) Not applicable.
(b) Not applicable.
(c) Previously reported in Alloy's Current Report on Form 8-K filed on
August 2, 2000 and Current Report on Form 8-K/A filed on October 2,
2000.
(d) Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) Exhibits
--------
Exhibit No. 3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1
to Registration Statement on Form S-1, No. 333-74159, and
incorporated herein by reference).
Exhibit No. 3.2 Restated Bylaws (filed as Exhibit 3.2 to Registration
Statement on Form S-1, No. 333-74159, and incorporated herein
by reference).
Exhibit No. 4.1 Form of Common Stock Certificate (filed as Exhibit 4.1 to
Registration Statement on Form S-1, No. 333-74159, and
incorporated herein by reference).
Exhibit No. 27 Financial Data Schedule.
(B) Reports on Form 8-K.
--------------------
The following reports on Form 8-K were filed during the quarter ended
October 31, 2000.
1. Current Report on Form 8-K filed on August 2, 2000 regarding Alloy's
acquisition of Kubic Marketing, Inc.
2. Current Report on Form 8-K/A filed on October 2, 2000 regarding Alloy's
acquisition of Kubic Marketing, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALLOY ONLINE, INC.
Date: December 15, 2000 By: /s/ Samuel A. Gradess
----------------- -------------------------
Samuel A. Gradess,
Chief Financial Officer
(Principal Accounting and
Financial Officer)
<PAGE>
ALLOY ONLINE, INC.
EXHIBIT INDEX
Exhibit No. 3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1 to
Registration Statement on Form S-1, No. 333-74159, and
incorporated herein by reference).
Exhibit No. 3.2 Restated Bylaws (filed as Exhibit 3.2 to Registration
Statement on Form S-1, No. 333-74159, and incorporated herein
by reference).
Exhibit No. 4.1 Form of Common Stock Certificate (filed as Exhibit 4.1 to
Registration Statement on Form S-1, No. 333-74159, and
incorporated herein by reference).
Exhibit No. 27 Financial Data Schedule.
24
